Reliance Infra to move aggressively on defence; plans to sell cement business

Mumbai: Reliance Infrastructure (Rinfra) yesterday reported a tepid 4.62 percent rise in net profit for July-September quarter at Rs 451.1 crore, and said it will focus on the defence sector, while exiting the cement and road businesses by monetising these assets.

Under the asset and capital-light strategy, wherein it will focus on less capital intensive defence business, the Anil Ambani-led company will monetise all of its 11 completed road projects in which it has invested Rs 8,800 crore.

RInfra will also sell the 5.6-million tonne per annum cement business, which the firm entered only a few years back.

"It is our strategy to focus on low capital intensive businesses. We recently made a foray into the defence sector which is relatively low capital intensive, has lower gestation period but has potential for superior return on equity," RInfra Chief Executive MS Mehta said.

On plans to monetise road assets, he said, "we've already made an investment of Rs 8,800 crore in the roads business, comprising 11 projects of around 1,000km across seven States. Ten of them are already revenue generating and the last one will start operations by next month."

The company plans to sell the projects in a bunch and not monetise it asset by asset, he added.

Group Chairman Anil Ambani had told the shareholders at the last AGM that, "defence is an opportunity that is now available to the private sector which was earlier only with the public sector. Our entry into the defence sector is in line with Prime Minister Narendra Modi's thinking about moving India forward, support Make in India and skilling programmes."